The US credit card debt is rising at its fastest pace in 20 years. Experts: High inflation forces people to spend their days on credit cards
The rapid rise of US credit card debt
According to a report by Russia's International News Agency on July 25th, a recent report shows that the growth rate of US credit card debt in the first quarter of this year was the fastest in 20 years. Financial experts believe that high inflation has forced many American households to borrow money by swiping their cards.
Hedgeye, an investment research firm, cited data from the Federal Reserve to release a research report stating that in the first quarter of this year, the total credit card debt in the United States increased by over 17% year-on-year, marking the largest annual increase in at least 20 years. The cost of revolving credit in the United States continues to climb to decades high levels. According to Federal Reserve data, as of last weekend, the average interest rate for new credit cards was 20.82%, compared to only 12% 10 years ago. According to data released in June, Americans currently hold a record high of nearly $988 billion in credit card debt.
![The US credit card debt is rising at its fastest pace in 20 years. Experts: High inflation forces people to spend their days on credit cards](https://a5qu.com/upload/images/5c39b66a955cbc8bbd75a84460c602fa.jpg)
Financial experts believe that the increasing credit card debt in the United States is partly due to high inflation forcing households to rely more on credit cards to pay for monthly expenses. Driven by soaring energy and food prices, the consumer price index reached a 40 year high of 9.1% in June 2022. Faced with high inflation, the Federal Reserve continues to raise interest rates from near zero to over 5%. Although inflation in the United States has slowed down, the market generally expects the Federal Reserve to raise interest rates again this week.
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